In real, where do they get the Rm (return on the market) when using the CAPM?

Question

Also, whats the time frame for the Rm thats commonly used?

also let me know where these rates are available.

Answer 1

CAPM is used to relate the riskiness of a security and its expected performance to the riskiness of the overall market and its performance. The "riskiness" of the underlying security is known as beta.

Generally, a fairly long period is measured to obtain beta, most often five years.

The beta factor is derived by performing a least squares regression between  prices of the stock and the corresponding  market index.

One of the better places to obtain long term index performance is from the Russell index website:

http://www.russell.com/Indexes/character...

Beta can generally be obtained from MSN Money. Here is a look at GE:

http://moneycentral.msn.com/detail/stock...

Hope that helps.